In a strategic move, iGate Global Solutions, a subsidiary of the US-based $500-million iGate Corporation, has acquired majority stake in Quintant, the Bangalore-based business service provisioning start-up in all cash deal, and appointed its advisory Phaneesh Murthy as the CEO of the merged entity.

Murthy had quit Infosys Technologies, while serving as head of the company's global sales and marketing, in the wake of a harassment suit filed by a woman employee in the US.

On becoming a full-fledged CEO of iGate, Murthy has decided to discontinue the activities of Primentor, the IT advisory firm, which he co-founded with his wife Jaya Murthy last year.

He will, however, continue to be on the board of the Chennai-based Future Soft Ltd as a non-executive director.

• Infosys sales chief quits over sexual harassment lawsuit

Within six months of incubating the start-up, the Hyderabad-based GMR group has sold its entire 51 per cent majority stake to iGate for $18.5 million at a premium of $2.5 million after investing $16 million in the first round of funding.

iGate also intends to acquire the balance equity (49 per cent) in Quintant in the next few months from its other promoters, mostly non-resident Indian angel investors, based in the United States.

In Indian rupee terms, the acquisition of Quintant at Rs 68.9 crore (Rs 689 million) provides iGate access to Rs 68 crore (Rs 680 million) in asserts and a hot cash of Rs 60 crore (Rs 600 million).

Besides assets and cash, iGate also gets Quintant's 60-member management team, its domain expertise in banking, insurance and financial services, and proprietary process tools and frameworks.

"The acquisition of Quintant will augment iGate's domain expertise and strengthen its presence in the financial services segment. As a leading global offshore IT services company, iGate will leverage its suite of offerings with the pioneering BSP (business services provisioning) expertise of Quintant," iGate co-founder Sunil Wadhwani stated.

According to GMR group director Kiran Kumar Gandhi, the transition of majority stake holding from the Rs 1400-crore (Rs 14-billion) infrastructure group to iGate will strategically position Quintant in a large well-established group in the IT and IT-enabled services domain.

The merger with iGate will give Quintant access to its Fortune 500 client base, including marquee global firms like GE, Bank of America, Dresdener Bank and Bank of Montreal, among others.

"iGate's global sales and delivery network spawns across 5 continents, with 8 global development centres and 35 offices worldwide," co-founder Ashok Trivedi disclosed.

Touted as the next big wave in outsourcing landscape, BSP will propel iGate into the fast-growing BPO space, and the integration of technology and operational capabilities will enable its evolution to a full-fledged platform.

"I look forward to building iGate into a gold standard organisation through operational excellence, customer service and corporate governance. We have the potential to emerge among the top five firms in the global services space in view of the synergies both the firms bring to the table," Murthy affirmed.

The Nasdaq-listed iGate Corporation offers BPO services and a range of IT solutions to about 500 clients the world over. It employs about 700 engineers in India and the US.

As its subsidiary, iGate Global Solutions offers a range of offshore IT services in diverse areas such as BPO, data management, business intelligence, embedded systems, ERP and enterprise application integration.

It employs about 3000 people in 19 offices worldwide, including six offshore and two offsite development centres.